The Lacey Act — originally mandated more than 100 years ago to protect wildlife from illegal trafficking — was amended in 2008 to include illegal logging legislation and since then has had a major impact on the flooring industry.

“The amendment expanded the Act to include wood and wood products, and specifically prohibits the import, sale or trade of wood and other forest products that are harvested illegally. With the passage of this legislation, illegally harvested materials can no longer enter the United States market legally,” explained Michael Martin, president and chief executive officer, National Wood Flooring Association (NWFA).

According to Martin, the U.S. does not have a problem with illegally harvested lumber as most domestic forest land is privately owned. However, this is not true throughout the rest of the world and therefore affects U.S. imports.

“Lacey simply provides a verification process that allows U.S. importers of wood to conduct due care in ensuring the wood they import is harvested legally. There is a chain of custody that is required from harvest to delivery,” Martin said.

However, according to Don Finkell, chair of the Hardwood Federation board of directors, the due care legislation written into the Lacey Act is too broad and unclear. “There’s a lot of uncertainty as to what exactly due care means. It is unclear how much you should do and when you have done enough to shield yourself from potential government prosecution. We think that defining due care is something that is in the interest of everybody and we don’t want to wait 20 years for the case law to say what it is.”

According to Martin, efforts have recently been made to draft voluntary Lacey Due Care Standards to help clarify the legislation. “Two due care standards have been developed, which are based on several risk assessments. The first is a country risk assessment.”

Every country is rated on a scale from high risk to low risk. This risk indicates the likelihood for illegal harvesting. The US and Canada are considered low risk for corruption, while China is considered high risk. Low risk countries don’t require much more than verifying that the lumber was really harvested in that country, according to Martin.

“The second risk assessment is for species,” Martin said. “Since most flooring is made from common species, there is generally not much species risk for flooring.”

Then, added Finkell, “You have to do a supplier risk. Do you know this supplier, have you had a long working relationship, do they know who their suppliers are, do they have a good record? Harvest permits? Operating permits?”

According to Martin, the final assessment is a review of the laws in the country of harvest (if it is a high risk country), and to make sure that the supplier has the correct permits to operate and harvest. Anyone importing from other countries, especially those at high risk for illegal logging, should have these things on file to prove due care.

Lacey evens the playing field

According to both Martin and Finkell, the Lacey Act not only helps protect the U.S. against illegally harvested materials entering the country but also helps protect American jobs.

According to Martin, recent enforcements of the Lacey Act have been in the news as Lacey violations are investigated and brought forth. The first was Gibson Guitar Company, which was charged with importing illegally harvested wood species for its guitars.

“The Gibson Guitar enforcement activity in 2010 and 2011 resulted in a big effort last summer to modify the Lacey Act within the U.S. House of Representatives,” Finkell stated.

According to Finkell, the changes that were proposed would have stripped Lacey of the tools necessary to enforce the intent of the Act, to prevent illegally harvested wood and wood products from entering the United States.

“And, they wanted to make the max penalty 250 dollars. Which is a traffic ticket,” Finkell said. “We fought the changes.”

“Lacey helps to level the playing field by introducing only legally sourced materials into the market,” Martin said.

Finkell explained, “If someone is stealing timber, their cost is much lower than your cost if you have to pay a fair market price for it. If you can’t compete because you have to pay a higher price for your raw materials you’re just not going to last long.”

The Hardwood Federation and the environmental groups that are in partnership realize that the act does not need to be any more complicated, and enforcement has the ability to bring clarity to the somewhat muddled specifics of the Act.

Once the Gibson case was settled, “it spelled out a compliance policy that the Department of Justice said Gibson needed to do from now on, and the legal opinion is that that will probably be referred back to the next time someone is in a discussion with the Department of Justice as to what they should or should not have done,” Finkell said.

According to Martin, just last week, federal agents from the Department of Homeland Security’s Immigration and Customs Enforcement and the U.S. Fish and Wildlife Service executed sealed search warrants at Lumber Liquidators’ corporate offices in Toano, Va., and another Lumber Liquidators location in Richmond, Va. Lumber Liquidators made statements regarding its policies and procedures for sourcing, harvesting and manufacturing its products, which indicates that this is an investigation tied to the Lacey Act.

“Enforcement will certainly help improve Lacey since it was intended to improve forestry worldwide,” Martin said.

According to Martin, Lacey is being championed by a broad coalition of business, environmental, labor and forest products groups.

“In places that historically have had high rates of illegal logging, like Indonesia, they’re now saying, well our wood products industry is pretty important to us, we need to comply with what these new laws are. And they have actually entered into voluntary partner agreements to clean up what is happening on the ground,” Finkell added.

Martin noted, “With only two cases brought since the Act was introduced more than five years ago, it stands to reason that Lacey has been successful in minimizing the threat of illegally harvested wood entering the U.S.”